Westpac IQ

Net exports mask softer domestic demand.

Structural tailwinds help fill the consumer gap.

Monday re-issue edition: analysis and forecasts for this week's key releases.

As Australian consumers and businesses become increasingly connected to the global economy, advances in data, technology and customer insights are reshaping foreign exchange. The result is a more relevant customer experience and, ultimately, greater confidence when transacting across borders.

Welcome to our Q2 2026 Sustainable Finance Market Update, which also includes a two-minute video highlighting key developments across the sustainable finance landscape. In this edition, we review first-half market activity, highlight notable sustainable finance transactions and explore how sustainability-linked and use-of-proceeds financing are supporting the continued evolution of Australia's Living sector. We also reflect on a quarter that saw the Federal Budget handed down and important regulatory and policy developments for the sustainable finance market.

The movement of digital money across the world is rapidly changing the shape of business and banking.

It was a "good week" for the Australian dollar, the currency climbing to fresh leg highs of 0.7208 against the US dollar Friday night and reaching multi-year highs against several major currencies. However, the move came unstuck later Friday after Fed Chair Kevin Warsh delivered a hawkish speech at the Jackson Hole symposium, reinforcing the Federal Reserve's commitment to returning inflation to target. Looking ahead, markets face a busy week, including Australia Q2 GDP and the RBNZ meeting (Wed), speeches from RBA Assistant Governor Brad Jones and Fed Governor Christopher Waller (Thur), and US non-farm payrolls (Fri).

The Australian dollar's steady climb became a sprint late last week, jumping 0.85% on Friday to fresh current leg highs near 0.7180. What had been a measured grind higher accelerated more emphatically, with the Australian dollar moving into the high 0.71s in just a few sessions. Unlike Jan/Feb's rallies, this move is not being driven by a hawkish RBA story or stretched positioning. Instead, support is coming from a weaker USD backdrop, rising gold prices, strength across Asian currencies and Australia's mining dividend season. A busy week lies ahead, with Australia's July CPI, RBA August meeting minutes and key GDP partials due, although they are likely to play second fiddle to Fed Chair Warsh's keynote speech at the annual Jackson Hole Symposium.

The Australian dollar got everything it needed last week to sustain this low key uptrend into a 7th week: a hawkish RBA (albeit in messaging, less so in their forecasts), softer US July inflation data damping Fed hike expectations, and swirling questions about whether long term US Treasuries are "money good". Locally, there's plenty to animate the Australian dollar this week: July labour force, Q2 Wage Price Index, Westpac Consumer Confidence and remarks from RBA Deputy Governor Hauser.